Heavyweight contractor Cimic Group Ltd (ASX: CIM) just secured a $540 million tunnel and infrastructure contract awarded by the Singapore Land Transport Authority.
Leighton Asia, a subsidiary of the group with a strong presence in Singapore, presented a successful bid as lead partner in a joint venture with local contractor Yongnam Engineering & Construction. The share of the project’s revenue stream accruing to Leighton Asia will be approximately $380 million, making this one of the biggest contracts won by Cimic in 2018 so far.
Just a week ago, Cimic announced that UGL, another of its subsidiaries, secured $140 million in maintenance services contracts for clients in the Australian resources sector. As at March 31, Cimic has work in hand of $35 billion, and yesterday credit-rating agency Standard & Poor’s upgraded the outlook for the company from negative to stable.
Despite the contract win, Cimic’s share price fell 0.1% to $42.40 today. The stock is down 20% from its 52-week high in December, and now trades at a PE ratio of just about 18x, assuming FY18 earnings in the middle of the company’s guidance range.
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Motley Fool contributor Tommaso Autorino has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.